Are the best things in life free? If two high-end designers take on a low-budget project as an experiment, they may soon find that they are. To illustrate the way their design approach can be applied to any project—large or small—Alex Jordan and Dan Smieszny agreed to show Alexandra Katz, the 25-year-old daughter of longtime clients, how to renovate a 1,400-square-foot apartment in Chicago for $5,000.

They began by trolling for castoffs in the basement of the house off Lake Shore Drive owned by Alexandra’s parents, Robert and Carlen Katz. A Manhattan designer might cut costs by foraging for discarded furniture on the sidewalks of New York. “Pickings are slimmer on the streets of this city because our trash collection is more efficient,” Jordan says. “I’d been telling Carlen and Bob to throw out stuff for years. I’m glad they never listened to me.”

The designers, with the help of members of their staff, painted the walls in the dining room and solarium a warm shade of gray.

The Katzes were married on Okinawa and bought a goodly amount of furniture and art in Asia. Their three children joined them on subsequent trips to China, Burma and Hong Kong, where they also acquired a few pieces of art. After the design firm Gregga Jordan Smiezsny redid the Katzes’ home, Alexandra and her siblings were given some of their parents’ old furniture. And so, when the apartment renovation for Alexandra Katz, a premed student, began, she was already in possession of some pleasing paintings, handsome wood furniture, and a sofa and a chair in need of reupholstering. Fortunately, her apartment consisted of four well-proportioned primary rooms—a living room, a dining room, a bedroom and a solarium that was to become a home office—large enough to hold all her belongings. The downside was that the rooms had been painted custard white.

It is a truth universally acknowledged by designers that color is one of the most inexpensive tools that can be used to bring drama to a vanilla space. Alexandra Katz owned a 19th-century Chinese ancestor portrait she had chosen while visiting Hong Kong in 2001. It would go on a wall in the living room. And the first piece Jordan and Smiezsny purchased—for $350 at a warehouse sale at Primitive Art Works in Chicago—was a mosaic rug they decided to hang on another wall. “It consists of simple blocks of color in earth tones similar to those in the Chinese watercolor, but more intense,” Jordan says. “It reminds me of a Sean Scully artwork. It has some damaged spots that you don’t see. If it hadn’t been on sale and damaged, it would have cost five times what we paid.”

The rug would inspire the palette for the entire apartment. The designers, with the help of members of their office staff, painted the living room walls terra-cotta, the bedroom walls a deep brown, and the dining room and solarium a warm shade of gray. “I thought that the last place I would ever have to paint was my mother’s house,” Smieszny says. “I was wrong.”

The designers steered Katz to Fishman’s Fabrics, an old-time Chicago fabric emporium. The three bought 28 yards of terra-cotta velvet—every inch the store had—for $20 a yard and had Katz’s hand-me-down living room sofa and Jean-Michel Frank-style chair reupholstered. “We saved on labor wherever we could, but none of us knew how to do upholstery work,” explains Jordan.

The apartment’s rooms have nine-foot-three-inch ceilings. Hanging from the ceiling in the dining room was a homely ’50s light fixture, and from the ceilings of the other rooms, a medley of overscale fans with lights. “The fans were garish. They were hideous sources of light,” Jordan says. “Lighting is one of the most significant elements in an interior. If lighting is unflattering to you or your guests, or it’s inadequate for reading, you won’t be happy. Good light adds another layer of drama.”

In Alexandra Katz’s bedroom, the furniture had been against a wall. The designers positioned the furniture on a diagonal, thereby visually enlarging the room.

The ceiling fans whirled away, to be superseded by an assortment of sconces and lamps. A pair of contemporary brushed-nickel floor lamps from Chrome Yellow, a furniture store on Lincoln Avenue, decorate the living room. “A room so full of dark-toned wood pieces can be ponderous,” Jordan says. “The metallic finish of the lamps energizes the room by giving it a bit of sparkle.” There are sconces in the hall and living room, from Crate & Barrel, and a pendant light in the dining room, from Pottery Barn. These were procured by the designers’ associates Stephan Jones and Nadine Ridley, who managed the project.

In the dining room, Jordan and Smieszny kept the varnished table that had belonged to Robert and Carlen Katz but replaced the spindly folding chairs they had given their daughter with four rattan chairs from Pier 1 Imports. “They have a classic shape, and they’re far more comfortable,” Jordan says. “Comfort is important.” Carlen Katz made the seat cushion covers from a cotton tablecloth the men found at Le Magasin, a shop that was also the source of two linen dish towels, which she sewed together to cover a pillow in the center of the living room sofa. “We were a busy bunch of elves,” she says with a laugh.

In Alexandra Katz’s bedroom, the furniture had been against a wall opposite the entrance. The designers positioned the furniture on a diagonal, thereby visually enlarging the room and creating more space as one walks in.

Many of the items purchased cost less than $300. Other changes Jordan and Smieszny made to the apartment cost nothing—their priceless talent did come for free. “It took one month to complete the job,” says Jordan. “It was stressful but rewarding as well. The addition of color was the most important change. The apartment has an intimacy that it didn’t have before. It’s a happier place for Alexandra to come home to.”